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Daily Market Update September 28, 2020

Early Morning Update

The Oct20 natural gas contract is trading down $0.09 at $2.05. The Nov20 crude oil contract is up $0.25 at $40.50.

Summary

As the October natural gas contract expires today, the last month has been a reminder of volatility in the markets we haven’t seen in some time. As the prompt month, October hit its trading high of $2.657 in its debut on Sep 28, and reached its low at $1.834 last week on the 22nd - a trading range of 82 cents! The ride included eight moves of +/-10 cents, a drop of 22.5 cents (10%) on the 17th, and a rise of 29.1 cents (16%) on the 23rd. Based on the last week trading and with below-normal temperatures to start October, the market could yield a choppy trading day. Shifting focus to the upcoming winter, NYMEX prices continue to hold strong, with Jan and Feb both trading over $3.30. Unlike the prompt month’s recent trading history, these months have stayed range-bound. Using Jan ‘21 as an example, trading had been contained to a 23-cent range, with the min at $3.23 and max at $3.45. As we move through Oct and Nov, could we start to see more volatility with the winter strip? Using last year as a proxy, maybe not, as Jan ‘20 traded in only a 25-cent range in Oct ‘19. This year has proven that anything can happen, so if market fundamentals remain mixed, the market may yield more volatility than we’ve historically seen for the upcoming winter.

 

Market Update 09 28 2020

Market Settles 09 25 2020

 

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